Schlumberger Ltd. (NYSE:SLB)

The financial ratios demonstrate several clear trends over the examined periods. The debt-related metrics show a consistent downward trajectory from 2020 through the early part of 2024, followed by some signs of marginal variability towards the end of the period.

Debt to equity

This ratio declined from a high of approximately 1.49 in the third quarter of 2020 to a low of about 0.57 in the first quarter of 2025, indicating a reduction in reliance on debt relative to equity. The downward trend was steady through 2021 and 2022, with minor fluctuations from 2023 onwards. A slight increase was noted in the final quarter of 2024 and into early 2025, suggesting a possible moderation in deleveraging efforts.

Debt to capital

Similarly, debt to capital decreased from 0.60 in the third quarter of 2020 down to a lower level around 0.36 in the first quarter of 2025. This consistent drop reflects an improvement in the capital structure, with the company reducing its proportion of debt financing. However, the ratio displayed a slight uptick near the end of the timeline, aligning with the pattern observed in the debt to equity ratio.

Debt to assets

The ratio decreased from 0.40 in late 2020 to approximately 0.25 at the start of 2025, signaling a gradual reduction in debt against total asset base. This suggests the company either grew its asset base or paid down debt, contributing to enhanced balance sheet strength. The ratio showed minor increases in the later periods but remained significantly below earlier levels.

Financial leverage

Financial leverage followed a downward path from a peak of 3.71 in the second quarter of 2020 to a level near 2.31 by early 2025. While generally trending lower, the metric experienced small oscillations after 2022, indicative of some changes in asset and equity proportions, but still reflecting an overall decrease in leveraged exposure.

Interest coverage

The interest coverage ratio displayed a noteworthy improvement, especially after a difficult period in 2020 where it registered negative values (-19.07 to -4.01). Starting in 2021, the ratio rose steadily, reaching double-digit levels exceeding 10 from the fourth quarter of 2022 through the first quarter of 2025. This trend indicates enhanced earnings relative to interest obligations, reflecting stronger operational performance or reduced interest expenses over time. A slight dip was observed in the last reported quarter but the ratio remained robust.

In summary, the analyzed ratios indicate a marked strengthening of the financial structure from 2020 to early 2025, characterized by reduced leverage, lower debt proportionality, and improved capacity to cover interest expenses. The company appears to have managed its debt prudently, improving financial stability and resilience throughout the periods observed. Minor reversals in some ratios towards the end of the timeline may warrant attention but do not detract from the overall positive trend.

Total Debt

The total debt shows a general declining trend from March 31, 2020, to December 31, 2023, decreasing from 16,642 million USD to 11,965 million USD, indicating an effort to reduce leverage over this period. However, starting in March 31, 2024, the total debt begins to rise again, reaching 14,002 million USD by March 31, 2025. This recent increase suggests a reversal in the prior deleveraging trend.

Total Stockholders’ Equity

Total stockholders’ equity demonstrates a consistent upward trajectory from March 31, 2020, when it stood at 15,561 million USD, reaching a peak of 21,511 million USD by September 30, 2024. After this peak, equity slightly declines to 19,515 million USD by March 31, 2025. This steady increase over most periods reflects growth in net assets and possibly retained earnings accumulation, supporting financial stability.

Debt to Equity Ratio

The debt to equity ratio reveals a clear trend of improvement in financial leverage from early 2020 through late 2024. Starting at 1.07 in March 31, 2020, the ratio increased initially, peaking at 1.49 in September 30, 2020, before steadily decreasing to 0.57 by March 31, 2025. This reduction in leverage indicates an enhancement in the company’s balance sheet strength, reflecting stronger equity relative to debt. Notably, there is a minor uptick to 0.72 in the final period, consistent with the recent increase in total debt and a slight drop in equity.

Overall Observations

The data over the examined periods suggest that the company has focused on improving its capital structure by reducing debt and increasing equity, which has enhanced financial leverage ratios beneficially. The reduction of the debt to equity ratio signals a lower risk profile associated with debt obligations. However, the recent uptick in total debt and the corresponding small increase in the debt to equity ratio at the end of the period may warrant attention to assess the sustainability and implications of this change. Equity levels remain robust despite the slight recent decrease, implying overall positive equity growth over time.

The financial data reveals notable trends in the company's debt and capital structure over the examined periods.

Total Debt

Total debt exhibited fluctuations throughout the periods. Initially, total debt increased from 16,642 million USD as of March 2020 to a peak of approximately 17,763 million USD in September 2020. Subsequently, a downward trend was observed, with total debt decreasing steadily through to December 2021, reaching 11,965 million USD. From early 2022 to mid-2024, total debt remained relatively stable with minor fluctuations between approximately 12,000 and 13,000 million USD. However, a notable increase occurred at the end of the last period, with total debt rising to 14,002 million USD by March 2025.

Total Capital

Total capital demonstrated moderate variability but generally followed an upward trajectory over the longer term. Starting from 32,203 million USD in March 2020, total capital decreased slightly during 2020 to a low point of 28,485 million USD in June 2021. From this point onward, an upward trend took place, with total capital increasing steadily and reaching approximately 33,517 million USD by March 2025. Minor declines were observed in some quarters, but the overall movement was positive.

Debt to Capital Ratio

The debt to capital ratio illustrates a pattern of gradual improvement in the company's leverage position over the majority of the analyzed periods. Initially, the ratio increased from 0.52 in March 2020, peaking at 0.60 in September 2020, indicating a higher proportion of debt relative to total capital. Following this peak, the ratio declined consistently through December 2023, reaching a low of 0.36 in March 2025, reflecting reduced leverage and an improved capital structure.

However, at the last observed point, the ratio increased slightly to 0.42 by March 2025, corresponding with the rise in total debt noted previously. This suggests a recent shift toward higher leverage after a sustained period of deleveraging.

In summary, the company experienced an initial increase in debt and leverage during 2020, followed by a sustained reduction in both debt levels and debt to capital ratio through early 2024. Total capital generally showed a recovery trend after mid-2021. The most recent data points to a reversal of the deleveraging trend, with both total debt and leverage rising moderately at the end of the analyzed timeline.

The analysis of the quarterly financial data reveals several noteworthy trends in the company's debt and asset management over the period from March 2020 to March 2025.

Total Debt

Total debt exhibited an initial increase from $16,642 million in March 2020, peaking around June and September 2020 at $17,366 million and $17,763 million respectively. Following this peak, a downward trend ensued, with debt gradually decreasing to a low of $11,965 million by December 2023. However, starting early 2024, total debt began rising again, reaching $14,002 million by March 2025. This pattern indicates a cautious approach to debt reduction post the early 2020 peak, followed by a renewed increase in leverage towards the end of the observed period.

Total Assets

Total assets experienced a decline from $48,594 million in March 2020 to around $42,036 million by March 2021. After this period, assets generally trended upwards, climbing steadily to a high of $49,775 million in September 2024. Slight fluctuations occurred thereafter, with total assets marginally decreasing to $49,002 million by March 2025. Overall, there is evidence of recovery and growth in asset base following the initial pandemic-related contraction, suggesting asset accumulation or appreciation over the longer term.

Debt to Assets Ratio

The debt to assets ratio started at 0.34 in March 2020, increasing to a peak of 0.40 during the September and December 2020 quarters, indicating a higher leverage during that period. Subsequently, the ratio declined consistently, reaching a low of 0.25 by December 2023 and maintaining this lower leverage level through early 2025, with a minor uptick to 0.29 in March 2025. This decline corresponds with the decrease in total debt and recovery of assets, reflecting improved balance sheet strength and reduced relative debt burden over time.

In summary, the company experienced increased leverage and asset contraction during early phases of the assessed period, likely reflecting broader economic challenges. Following that, a clear deleveraging trend is observed alongside asset growth, signaling improved financial health. The recent increase in debt levels indicates strategic changes that may warrant ongoing monitoring to assess future financial stability.

The financial data over the periods reflects several notable trends in the company's asset base, equity position, and leverage ratios.

Total Assets

The total assets demonstrate moderate fluctuations with a general upward trend from March 31, 2020, to December 31, 2023. Initially, assets decreased from 48,594 million USD to a low of 40,908 million USD by June 30, 2021. After this period, there is a consistent rise, peaking at 47,957 million USD by December 31, 2023. However, a slight reversal occurs thereafter, with total assets modestly declining to 49,002 million USD by March 31, 2025. This suggests some asset accumulation efforts after an initial contraction, followed by stabilization in recent periods.

Total Stockholders’ Equity

Stockholders’ equity shows a clear recovery and growth trend from 12,040 million USD at June 30, 2020, after a drop from the initial 15,561 million USD at March 31, 2020. Equity progressively increased reaching a peak of 21,511 million USD by March 31, 2025, reflecting strengthening capitalization and improved retained earnings or capital injections over the observed periods. Some minor declines are noted towards the end of the series, specifically between December 31, 2024, and March 31, 2025, indicating potential payouts, write-downs, or other adjustments affecting equity.

Financial Leverage (Ratio)

The financial leverage ratio exhibits a significant downward trend from above 3.5 in the initial periods (specifically 3.71 at June 30, 2020) to a range just above 2.3 in more recent periods. This ratio decreased steadily from early 2020 through late 2023, indicating reduced reliance on debt financing relative to equity. The lower leverage ratio reflects a stronger equity base relative to total assets or a reduction in debt levels. In the last observed period (March 31, 2025), there is a slight increase to 2.51, which may suggest a mild increase in leverage after several years of deleveraging.

Overall, the data depicts a phase of initial contraction in asset size and equity in early 2020 followed by a recovery and growth phase until late 2023. The financial leverage trend confirms a gradual improvement in the company's capital structure, with decreased dependency on external debt, fostering potentially greater financial stability. The minor increases in leverage and the reduction in equity in the latest reported periods advise close monitoring of capital structure shifts going forward.

Earnings before interest and tax (EBIT) Trend

The EBIT figures show a significant improvement over the period starting from March 31, 2020, with an initial large negative value of -7,953 million US dollars, indicating a strong loss. This negative trend softens progressively in 2020, becoming positive in the third quarter (September 30, 2020) at 84 million US dollars and improving through the remainder of 2020. Throughout 2021, EBIT maintains steady growth, ranging between 522 million and 892 million US dollars. The upward trajectory continues into 2022 with EBIT reaching a peak of 1,468 million US dollars in December. In 2023, EBIT fluctuates but remains in a higher range compared to earlier years, reaching a maximum of 1,563 million US dollars in December. However, starting from the first quarter of 2024, EBIT shows a slight downward movement, decreasing from 1,470 million to 1,210 million US dollars by March 31, 2025. Overall, EBIT demonstrated a strong recovery and growth from a substantial loss in early 2020 to solid positive earnings through 2023, with some moderation observed in 2024 and early 2025.

Interest Expense Trend

Interest expense remained relatively stable over the entire period, fluctuating slightly between 113 million and 147 million US dollars. There is no clear upward or downward trend. Instead, interest expense shows minor variances quarter to quarter without significant shifts, indicating consistent financing costs throughout the observed years.

Interest Coverage Ratio Trend

The interest coverage ratio, calculated as EBIT divided by interest expense, shows a dramatic improvement over time. In the early quarters of 2020, the ratio is strongly negative, reflecting the negative EBIT and inability to cover interest costs. Beginning with the quarter ended December 31, 2020, the ratio moves into positive territory, initially at 3.43 and steadily increasing thereafter. Throughout 2021 and 2022, the coverage ratio rises substantially, peaking at 12.19 in September 2024. This increasing ratio indicates a strengthening operational profitability relative to interest expenses, suggesting improved financial health and lower risk regarding debt servicing. Slight declines are seen at the end of the observed period but the ratio remains robust above 10 times coverage.

Summary of Financial Health Implications

The data indicates a significant recovery and strengthening of operating profits starting in late 2020, transitioning from heavy losses in early 2020. Stable interest expenses combined with increasing EBIT have resulted in a marked improvement in interest coverage ratio, reflecting enhanced ability to meet interest obligations comfortably. Although EBIT shows some reduction from late 2023 into early 2025, the coverage ratio remains healthy, suggesting sustained financial stability despite minor earnings volatility. This trend underscores increased operational efficiency and improved capital structure management over the analyzed period.